Platform and Standards: Part 1

In the space of technology driven business, it is really challenging to have a sustainable impact. The barrier to entry for a new competition to come up and take your place is as low as ever before. The cost of creating a new product for a bunch of smart engineers is peanuts thanks to the advent of cloud computing and open source resources. In such an environment, I think there are two good ways you can develop a business that is sustainable — develop a platform or create standards.

Platform in very simple terms is an infrastructure that forms the foundation. It’s a foundation of operations. It’s a base that provides enough opportunity to develop applications on top of it. The more common platforms we use every day are Windows, iOS, Android, Facebook, etc. Others being cloud computing platforms like Amazon AWS, gaming consoles like Xbox and PlayStation, and web browsers like Firefox.

It is really hard for a standalone platform to survive. The success of the platform like any other product depends on how many consumers adopt it. Consumers adopt a platform if there are applications for them to use on the platform. The more the applications for diverse community, higher is the adoption.

There is somewhat of a chicken and egg problem here — independent developers creating applications for a platform and consumers adopting the platform. To circumvent this, the platform developer should create the initial applications for mass consumer market. Be it Office for Windows or Safari for iOS.

Platforms have a unique ability to generate a network effect. More applications on it and more consumers adopting it provides a platform great competitive advantage and creates strong barrier to entry.